NO. 83-225
I N THE SUPRET4E COURT OF THE STATE OF ?I!ONT,IZNA
1 9 83
IN RE THE MARRIAGE OF
PATRICIA ANN GIBSON,
P e t i t i o n e r and A p p e l l a n t ,
and
HARLEY GIBSON,
Respondent and R e s p o n d e n t .
APPEAL FRON: D i s t r i c t Court o f t h e Fourth J u d i c i a l D i s t r i c t ,
I n and f o r t h e County o f Y i s s o u l a ,
The H o n o r a b l e J o h n S . Henson, J u d g e p r e s i d i n g .
COUNSEL OF RECORD:
For A p p e l l a n t :
F e r g u s o n F; M i t c h e l l , l l i s s o u l a , blontana
For Respondent:
D a t s o p o u l o s , ?!acDonald 4 L i n d , P.!issoula, Montana
S u b m i t t e d on B r i e f s : July 21, 1983
Decided: November 3 , 1 9 8 3
Filed:
NUV j - lggj
- -
-
Clerk
Mr. Justice Fred J. Weber delivered the Opinion of the Court.
Patricia Ann Gibson (Wife) appeals from a judgment of
the District Court of the Fourth Judicial District. That
judgment concluded that interest on $7,500 due from Harley
Ross Gibson (Husband) to Wife should accrue from March 7,
1983, the date of the judgment. It ordered that each party
bear his or her own attorney fees. We reverse the judgment
of the District Court.
The following issues are presented on appeal:
1. Can a property settlement agreement, incorporated
into a dissolution decree, be modified by oral agreement?
2. Was there substantial evidence to support the
District Court's finding that the parties effected oral
modification of the dissolution decree?
3. When did interest begin to accrue on the property
payment due from Husband to Wife?
4. Did the District Court abuse its discretion by
failing to award attorney fees to the prevailing party in the
enforcement action?
The parties chose to dispose of their marital property
by executing a property settlement agreement, which they
entered into on November 15, 1979, was approved by the court,
and was incorporated into the dissolution decree on that same
date. The agreement provides in part:
"That in payment for Wife's interest in the
property and for maintenance, Husband will pay to
Wife a total sum of TEN THOUSAND DOLLARS
($10,000.00) with TWO THOUSAND FIVE HUNDRED DOLLARS
($2,500.00) due and payable on the date of the
final decree of dissolution of marriage and the
remaining SEVEN THOUSAND FIVE HUNDRED ($7,500.00)
due - (6) months - the date of the final
- six from - -
decree -of-dissolution - marriage.
of "
(emphasis
added)
The agreement makes no mention of the real property owned by
the parties as joint tenants at that time. Nothing in the
agreement or the decree indicates that the $7,500 payment was
conditioned upon funds becoming available from a particular
source or upon Husband's ability to satisfy the obligation.
The agreement further provides that:
"Should any action be commenced to enforce, modify,
or interpret any provisions contained herein, the
Court, as a cost of suit, shall award a reasonable
attorney's fee to the successful party." (emphasis
added)
On February 14, 1983, Wife filed a Motion for Order to
Show Cause why Husband shoul-d not be held in contempt for
failure to pay Wife $7,500 in 1980, as ordered by the court.
Wife also requested the court to order Husband to pay
interest on the amount due, as well as reasonable attorney
fees and costs incurred in bringing the enforcement action.
A hearing was conducted April 4, 1983.
Husband admitted that he owed the wife $7,500. He
testified that it was - understanding at the time of the
his
dissolution decree that the $7,500 was to be obtained "from
the sale of the only asset that we had at that time, which
was a piece of land." He also testified that it was his
understanding that the $7,500 would be paid as soon as the
land was sold.
"Q. So whether it was six months as indicated in
the decree or earlier or later, it was your
understanding it would be paid when the land
turned?
"A. That's right."
A balloon payment on the real property fell due in the
spring of 1980. The seller denied Husband's request for an
extension of time. Husband borrowed funds from a bank to
make a timely payment to seller. As a condition precedent to
the bank loan, the bank required that Wife's name be removed
from the property title. The bank provided a quitclaim deed
to the Husband, who forwarded it to the Wife. He testified
that the Wife agreed to the transaction, but he specifically
denied that the deed indicated anything about Wife's
understanding as to when she would be paid.
"Q. And did you indicate to her anything about the
payment of her seventy-five hundred dollars at that
time?
"A. No -- well, I believe all I would have said
was that the bank has requested that you sign the
land over to me so that they will take the mortgage
on it, and it was more for their convenience than
anything else, as I remember it."
Husband presented no evidence as to Wife's understanding of
when the $7,500 obligation would be paid.
Wife testified that she signed the deed before
Husband's payment was due. As far as she was concerned,
Husband's bank transaction and his obligation to her were
separate and d.istinct. She testified that it was her
understanding that $7,500 was due to her six months from the
time of the divorce, i.e. on May 16, 1980.
"Q. Did you at any point agree to wait until the
land was sold?
"A. No, Ross kept telling me, 'You will get your
money when the land sells,' but I said, 'I want my
money as soon as possible.'"
On cross-examination, the Wife was asked whether she demanded
payment at the time she signed the quitclaim deed. She
testified that she told Husband she wanted her money and he
told her, "You will get it when the land sells." She
explained that prior to this enforcement action, she and her
attorney had made numerous demands for payment. Wife
concluded she had been "overly generous" in not instituting
legal proceedings against Husband earlier.
The District Court's Findings of Fact, Conclusions of
Law and Order of March 7, 1983 provide in pertinent part:
"The parties entered into a verbal agreement which
was not specifically set forth in the Marital and
Property Settlement Agreement, that the balance of
the Ten Thousand Dollar ($10,000.00) amount for the
wife's interest in the property and for maintenance
would be paid upon sale of the specific real
property described above. The Petitioner agreed to
accept such payment for her interest in the land
and for maintenance." Finding of Fact No. 4.
"Despite the fact that the Marital and Property
Settlement Agreement provided that the sum of Seven
Thousand Five Hundred Dollars ($7,500.00) was due
from Respondent to Petitioner six (6) months from
the final Decree of Dissolution, Petitioner, in
accordance with the verbal agreement of the
parties, took no action until February 14th, 1983,
the date of the Order to Show Cause herein, in
attempting to obtain payment of the Seven Thousand
Five Hundred Dollars ($7,500.00) amount." Finding
of Fact No. 8.
"Both parties are financially able to pay their own
costs and expenses in this matter." Finding of
Fact No. 10.
"Respondent shall have until May lst, 1983 to pay
to the Petitioner the full sum due plus interest as
hereinafter set forth." Conclusion of Law No. 3.
"Petitioner is entitled to interest on the Seven
Thousand Five Hundred Dollar ($7,500.00) amount
only from the date of this Judgment at the
statutory rate." Conclusion of Law No. 5.
The court ordered Husband to pay Wife $7,500, plus interest
accrued at the statutory rate from March 7, 1983. The court
further ordered that if payment were not made on or before
May 1, 1983, the court would order the property sold and Wife
might be entitled to a deficiency judgment.
Modification of a provision for maintenance or property
disposition is governed by section 40-4-208, MCA. ~lthough
the property settlement agreement provided that $10,000 would
be paid by Husband "for Wife's interest in the property and
for maintenance," both parties treated this as a property
disposition provision on appeal.
Section 40-4-208(3), MCA provides:
"(3) The provisions as to property disposition may
not be revoked or modified by a court, except:
(a) upon written consent of the parties; or
(b) if the court finds the existence of
conditions that justify the reopening of a
judgment under the laws of this state."
The District Court made no findings or conclusions indicating
that there were conditions that justified the reopening of
the 1979 decree. No evidence of oppression, fraud or malice
was presented at the show cause hearing.
Husband argues on appeal that the quitclaim deed
executed by the Wife constitutes "written consent" on her
part to be paid when Husband sold the property. The quit-
claim deed was not offered as evidence at the hearing and is
not part of the record on appeal. Husband's assertion of
written consent is contradicted by the District Court's
specific finding that the parties entered into a verbal
agreement. Both parties testified that Wife's signing of the
deed was a condition required by the lender bank, not an
agreement to postpone the due date of the property settlement
payment.
Section 40-4-208(3), MCA specifies that a provision as
to property disposition may not be modified by a court unless
the parties have consented in writing to the modification or
the court finds conditions that justify reopening the
original decree. We hold that the District Court's
modification of this provision of the parties' agreement was
a clear abuse of discretion. Since this holdinq nullifies
the second issue on appeal, we proceed to the question of
interest.
11.
The parties' settlement agreement made no provision for
accrual of interest on the amount due from Husband to Wife.
Husband argues on appeal that because the parties orally
agreed to postpone the due date of the payment, interest
should not begin to accrue until March 7, 1983, the date of
the District Court's modification order. Wife contends that
under both judgment and contract law, she is entitled to
interest from May 16, 1980, the date the payment was deemed
due by order of the court.
Wife relies on Williams v. Rudke (Mont. 1980), 606 P.2d
515, 37 St.Rep. 228. There, we held that when the marital
dissolution decree is silent as to interest, such interest is
automatically collectible by the judgment creditor spouse on
past due payments for support or maintenance, the same as any
other money judgment. Williams, 606 P.2d at 519, 37 St.Rep.
at 234. More recently in Torma v. Torma (Mont. 1982), 645
P.2d 395, 398, 39 St.Rep. 839, 842, this Court reiterated
that interest is automatically collectible by the judgment
creditor spouse on past due child support payments, absent a
contrary provision in the dissolution decree.
Knudson v. Knudson (Mont. 1981), 622 P.2d 1025, 38
St.Rep. 154, is more on point with the present case since
interest on a cash award was at issue. Under the Knudson
decree, the wife was to receive $13,000 from the husband in
September 1978 and $6,000 in September 1979. No such
payments were made by the husband. This Court noted that
once a person is liable for a money judgment and payment is
not made, the person entitled to the judgment is further
entitled to a fair rate of interest. "This Court will not
allow the husband to avoid paying interest merely by arguing
that his wife did not do enough to secure it." Knudson, 622
P.2d at 1027, 38 St.Rep. at 157. We affirmed the lower
court's award of interest on the outstanding obligations.
Interest accrued from the payment due dates specified in the
original decree.
In the present case and in accord with Knudson, we hold
that the same principle applies where a decreed 1-ump sum cash
payment is past due.
Section 25-9-205(1), MCA provides that, unless otherwise
specified in the contract, interest at the rate of 10% per
annum is payable on judgments recovered in Montana courts.
By incorporation into the decree, Husband's obligation to pay
Wife $7,500 six months after entry of the final decree became
part of the District Court's judgment. We hold that he is
liable to the wife for interest accrued at the statutory rate
from the date on which payment was due until the date on
which payment was made.
Husband alleges in his brief that he made a payment of
$7,625.05 to the wife on May 6, 1983. Because the appellate
record terminates on April 25, 1983, the date on which Notice
of Appeal was filed, this Court cannot verify this assertion.
For this reason, we remand the cause for the District Court
to determine the date on which payment, if any, was made and
to compute the interest due to Wife from Husband from May 16,
1980 to the date on which the principal amount due was paid.
Bolstad v. Bolstad (Mont. 19831, 660 P.2d 95, 40 St.Rep.
344 is on all fours with this case regarding the issue of
attorney fees. The Bolstad property settlement agreement
stated:
"Should any future action be commenced to enforce,
modify or interpret any provision of this
agreement, the Court shall award reasonable
attorneys fees for the successful party as a cost
of suit. "
This language is indistinguishable from the attorney fees
provision in the Gibson agreement. In Bolstad, this Court
concluded that the wife was the successful party and
"according to the agreement, she must be awarded reasonable
attorney fees." 660 P.2d at 97, 40 St.Rep. at 347.
We reverse the order of the District Court and remand
the cause for determination of whether payment of the $7,500
due from husband to wife has been made; for determination of
interest owing on the $7,500 from May 16, 1980 to the date on
which the principal amount was paid; and for determination of
the reasonable attorney fees to be awarde
We concur: